Notes, summaries, assignments, exams, and exercises for Economics for Baccalaureate

Economic Growth, Development, and Sustainability

Measurement and Consideration

Economic growth is usually measured as a percentage of real GDP growth (excluding the effect of inflation). Economic growth is historically considered desirable because it bears a certain relation to the amount of material goods available and, hence, some improvement in the living standards of people. However, some are beginning to think that economic growth is a dangerous double-edged sword. Because it measures the increase in an economy producing goods, it is also related to what is consumed or, in other words, spending.

Growth in the Short and Long Term

Short-Term Variation in Economic Growth

This variation is known as the business cycle, and almost all economies regularly...

The Origins of the Capitalist System

Mercantilism

Mercantilism is an economic theory driven by the need to build national wealth, understood as the accumulation of wealth, gold, and silver. As countries generally do not possess large natural reserves of these precious materials, the only way to accumulate them was through trade. This meant developing a positive trade balance, or in other words, ensuring that exports exceeded imports, as international payments were made in gold and silver.

Physiocracy

Physiocracy is an economic theory that considers the primary sector to be the only genuinely productive sector of the economy, capable of generating a surplus upon which all else depends. It is the only sector capable of creating wealth.

Economic Liberalism

Economic...

Key Economic Agents and Their Decisions

Economic agents are the fundamental decision-makers in the economy:

• Households and Individuals: With limited incomes, they must choose how to allocate resources (e.g., enjoying holidays versus investing in home reform or savings).
• Companies (Firms): They produce goods and services and decide how many workers and how much equipment to use, given their limited capital resources.
• The State, Autonomous Regions, and Municipalities: Operating with a defined budget, they must decide on public spending priorities (e.g., investing in hospitals versus roads).

Understanding Economic Needs

Economic needs drive consumption and production:

• Primary Needs: These are essential requirements that must be met in order to survive

Economic Liberalism: Core Principles

The basic principles of economic liberalism were developed in the late eighteenth century by a group of British thinkers known as the Classical School.

• Adam Smith defended the supremacy of the individual against organized estates or groups. He considered the pursuit of self-interest as an engine for economic development.
• The personal interest of each individual ensures that each good is produced in the quantity that is demanded.
• Interests are balanced in the market by the "invisible hand," which adjusts prices through the game of supply and demand to achieve an optimal balance.
• The state should stay out of the economy and eliminate protectionist barriers that hinder economic growth.
• David Ricardo argued that labor

1. The Productive Function

The productive function is the set of processes and activities necessary to build a good or service, based on a set of productive resources.

Role of the Production Department

• Provisioning: Includes the management of procurement and the selection of suppliers.
• Manufacturing: Utilizes raw materials, labor, and machinery to achieve the final product.
• Storage: Includes the warehousing of raw materials for production and end products intended for sale.
• Quality Control: Ensures the product quality meets customer demands.

Interdepartmental Relationships

• Commercial Department: Investigates the characteristics of products that customers want.
• Financial Department: Seeks financial resources for the acquisition of production machinery

Indirect Tax: Value Added Tax (VAT)

Value Added is the difference between the value of goods produced and the cost of raw materials and other intermediate goods used to produce them. VAT is the tax on this added value. It is an indirect tax levied on consumption and taxes the following:

• the supply of goods and services provided by employers and professionals;
• intra-Community acquisitions of goods (European Union);
• imports of goods made by entrepreneurs, professionals or individuals.

Not all transactions involve the payment of VAT; some are exempt, such as education or health services. In the case of this tax, businesses and professionals "support it" when they pay for goods and services (purchases and expenses) and it has an impact when they charge...

Understanding Business Environmental Factors

Businesses operate within a dynamic environment influenced by various external factors. These can be broadly categorized into general (macro) and specific (micro) environmental factors, both of which significantly impact a company's operations and strategic decisions.

General Environmental Factors

These macro-environmental factors affect all businesses within an economy, though their impact may vary by industry.

Economic Factors

These include the degree of economic development and industrialization, available infrastructure (transport and communication networks), the level of economic activity (business cycles), unemployment rates, interest rates, and inflation. For example, in a phase of economic growth...

Defining the Business: Economic and Organizational Perspectives

From an economic standpoint, a company functions as an economic unit that combines various factors of production to provide goods and services to the public. From an organizational point of view, it involves the design and maintenance of a system based on defined tasks, personnel roles, internal relationships, and control processes to monitor the achievement of established objectives.

Decision-Making Environments and Criteria

A decision environment is characterized by the degree of certainty regarding the state of nature. Based on different decision criteria, environments can be categorized as:

• Certainty: A single, known state of nature exists.
• Risk: Multiple states of nature exist,

Banking System Functions and Monetary Policy

Functions of the Banking System: The banking system performs several critical roles, including the uptake of funds, provision of loans, financial counseling, securities custody, debit receipts, and transfers.

Monetary Policy: This refers to the set of actions taken by the monetary authority to control the money supply, its price, and interest rates to achieve specific macroeconomic objectives.

• Expansive Policy: This approach increases aggregate demand, lowers interest rates, and increases the money supply.

Causes of Unemployment and Economic Schools

Causes of Unemployment: Unemployment can be attributed to an insufficiency of demand, wage rigidity, improvements in competition levels, technological advances,...